Union Budget 2021 proposals

General Proposals:
Through the past year, the Finance Minister announced a Rs. 30-lakh-crore plan, in ‘mini-budgets’ to beat Covid
  • AtmaNirbhar Bharat programmes
  • Performance-linked incentives
  • Boost for domestic manufacturing
  • Improved credit access for enterprises
  • Moratorium on interest payments
  • Thrust on affordable housing
  • Booster shots for MNREGA

The total impact of Atmanirbhar Bharat and measures by RBI was Rs 27.1 lakh crore, which amounts to 30 per cent of GDP,” FM said.
India has two COVID-19 vaccines available and we expect two more vaccines soon, the Finance Minister said
FM lays out a Rs 64,180 crore spending plan for healthcare over the next six years
  • Will be spent on primary, secondary and tertiary healthcare
  • In addition to the National Health Mission.
  • 17,000 rural and 11,000 urban health and wellness centres to be set up
  • Integrated public health labs to be set up in each district
FM listed the below as main pillars of Budget 2021
  • Health
  • Human capital
  • Innovation and R&D
  • Physical infrastructure
Announcement of PM Health Yojana, providing every opportunity for recovery, and to be totally digital
Intention to focus on reduction of single use plastic, air pollution and segregation of waste, in the Swacch Bharat and Swasth Bharat. 
Government to launch Mission Poshan 2.0; Jal Jeevan Mission Urban will be launched. The Urban Swachh Bharat scheme will be implemented with an outlay of over Rs 1.4 lakh crores.
Jal Jeevan Mission Urban to have an outlay of Rs 2.87 lakh crore.
FM announces Rs 35,000 crore for Covid-19 vaccine.
Vehicles to undergo Fitness test after 20 years for personal vehicles; after 15 years for commercial vehicles, announcing a voluntary vehicle scrapping policy.
New health infra scheme with higher outlay of Rs 61,000 crore
217 projects worth over Rs 1 lakh crore completed under National Infrastructure Pipeline
Government to set-up a Development Finance Institution (DFI), capitalised with Rs 20,000 crore
  • India will introduce bill to set up new Development Financial Institution.
  • New DFI aims to have lending portfolio of Rs 5 lakh crore in 3 years
FY22 capital expenditure up 34.5% (Vs FY21 BE), at Rs 5.54 lakh crore.
Seven ‘Textile Parks’ to be developed in the next 3 years
Railways to monetize dedicated fright corridor assets for operations and maintenance after commissioning
Infra boost: Providing Rs 1.15 lk cr for Railways, privatizing airports
  • Out of the Rs 1.15 lk cr for Railways, Rs 1.07 lk cr is towards CAPEX
  • Indian Railways national rail plan for India to prepare a future-ready railway system by 2030.
  • Indian Railways have a National Rail Plan for 2030.
  • Next lot of airports to be privatized in tier 2 and 3 towns and cities
Highway infra work proposed includes building 8,500-km of highways by March 2022.
  • 3,500 km corridor in Tamil Nadu
  • 1,100 km in Kerala at investment of Rs 65,000 cr
  • 675 km in West Bengal at a cost of Rs 95,000 cr
  • 1,300 km in Assam in the next 3 years
National Monetisation Pipeline for brownfield projects to be launched. NHAI and PGCIL have sponsored one InvIT each.
  • 5 operational roads with estimated enterprise value of Rs 5,000 cr being transferred to NHAI InvIT
  • Transmission assets worth Rs 7,000 crore to be transferred to PGCIL InvIT
The government aims to spend Rs 1.97 lakh crore on various PLI schemes over the next 5 years, starting this fiscal. This is addition to the Rs 40,951 crore announced for the PLI for electronic manufacturing schemes.
Pipelines of GAIL (India) Ltd, Indian Oil Corp (IOC) and HPCL will be monetised
Ujjwala Scheme will be extended to cover 1 cr more beneficiaries. Will add 100 more districts in the next 3 years for city gas distribution
Proposal to consolidate provisions of SEBI Act, Depositories Act, Securities Contracts Regulation Act, Government Securities Act.
Government to provide Rs 18,000 crore for public buses.
In the power sector, Rs 3.05 lakh crore outlay announced with 100 more cities to be added in the next 3 years to the gas distribution network.
Rs 1,000 crore to solar energy corporation and Rs 1,500 to renewable energy development agency
Government to amend Insurance Act to allow higher FDI
  • FDI limit in insurance increase to 74% from 49%.
  • Govt allows foreign ownership in insurance with safeguards.
Government allots Rs 20,000 crore for bank recapitalisation, as emphasis will be on the need to clean up banks’ books.
Proposal to revise definition under Companies Act, 2013 for small companies by increasing their threshold for capitalization to not exceeding Rs 50 lakh to not exceeding Rs 2 crore and turnover not exceeding Rs 2 crore to not exceeding Rs 20 crore.
FDI in insurance sector proposed to be hiked to 74% from 49% now
After dilberating on this for years, finally an announcement of a Bad Bank; A new asset reconstruction and asset management company announced 
Government to support the development of a world-class fintech hub at GIFT, investor charter to be introduced
Divestment target for FY22 at Rs 1.75 lakh cr, FM says
  • In FY21, the government had budgeted to raise Rs 2.1 lakh crore through divestments but fell short.
  • Some of the big ticket divestments planned last year, like the stake sale in LIC, may conclude this year.
  • The government has approved a new public sector enterprises policy, which is intended to drive privatisation.
Fiscal support in FY22 depends on revenue generation from the success of these programmes.
The one man show, Government to now allow one-person companies
  • No restriction on paid-up capital and turnover, to incentivise incorporation of one-person companies
  • Conversion of one-person company to any other kind, reducing residency limit from 182 days to 120 days
  • Allow non-resident Indians to incorporate one-person companies in India
Government to privatise 2 PSU banks, one general insurance company in FY22
  • It will complete the divestments of BPCL, CONCOR and SCI in financial year 2021-22.
  • Will bring IPO of LIC in FY22
Farmers find a way in the bahi khata. Enhanced agri-credit target for FY22, gives update on welfare schemes.
  • To increase provision to rural infra development fund to Rs 40,000 crore from Rs 30,000 crore
  • Five major fishing harbours to be developed as hubs for economic activity
  • Micro irrigation corpus doubled to Rs 10,000 cr. Agriculture infra fund will be made available to APMCs.
Scheme updates
  • 54 crore farmers benefited from MSP in paddy and wheat in FY21 vs 1.24 crore YoY
  • Amount paid to farmers for wheat in FY21 was Rs 75,060 crore vs Rs 62,802 crore in FY20
  • Amount paid to farmers for paddy in FY21 seen at Rs 1.72 crore Rs vs Rs 1.41 lakh crore in FY20
  • Amount paid to farmers for pulses in FY21 seen at Rs 10,530 crore vs Rs 8,285 crore in FY20
69 crore beneficiaries or 86% covered under one-nation, one-ration
MSME allocation to be doubled. Government to set aside Rs 15,700 crore in FY22
Government also proposes to reduce margin money requirement from 25% to 15% for startups.
Minimum wages to now apply to all categories of workers. Women to be allowed to work in all categories with adequate protection.
Government announces multi-state co-operative for ease of doing business
India to launch Deep Ocean Mission, with allocation of Rs 4,000 crore over 4 years.
FY21 fiscal deficit at 9.5% of GDP. Fiscal deficit is hoped to reach below 4.5% by FY26.
  • FY21 gross expenditure seen at Rs 34.5 lakh crore
  • FY21 capital expenditure seen at Rs 4.39 lakh crore
  • FY21 fiscal deficit pegged at 9.5% of GDP
  • FY22 fiscal deficit target at 6.8% of GDP
  • FY22 gross expenditure seen at Rs 34.83 lakh crore
  • FY22 capital expenditure seen at 5.54 lakh crore
  • Market borrowing in FY22 seen at 12 lakh crore
Rs 1,500 crore for promoting digital mode of payment
Rs 300 crore to the Government of Goa for celebration of Goa’s Liberation from Portuguese rule
Over 15,000 schools to be qualitatively strengthened under National Education Policy
Direct Tax Proposals:
Reopening of assessments restricted to 3 years from 6 years. Only in cases where there is concealment of income above Rs 50 lakhs, the reopening can be done for 10 years and that too with the prior approval of the CCIT.
Tax burden on senior citizens above 75 years reduced. Senior citizens over 75 years of age who only have pension and interest income are exempt from filing returns.
Income Tax Audit turnover limit increased from Rs 5 Crores to Rs 10 Crores (for those transacting 95% of their business other than in cash).
Allocation of Rs 3,726 crore for forthcoming Census. This will be the first digital census
Advance tax liability on dividend income shall arise only after the declaration or payment of dividend.
Govt to set-up a faceless dispute resolution mechanism for small taxpayers.
Government to notify rules to eliminate double tax for NRIs on foreign retirement funds
For ease of compliance, dividend payment for REIT and InVIT exempted from tax.
Government to increase maximum threshold paid-up capital of small companies from Rs 50 lakh to Rs 2 crore and increase the threshold of maximum turnover from Rs 2 crore to Rs 20 crore.
 Govt to extend eligibility of erstwhile tax sop on home loan up to FY22; propose that affordable housing projects can avail tax holiday for one more year
Tax holiday for aircraft leasing business in Gift city
Government to provide tax exemption for relocating funds to IFSC
Income tax return filers increased to 6.48 cr in 2020 from 3.31 cr in 2014, says FM.
Proposal for extension of tax holiday for start-ups by one more year.
The government will borrow Rs 80,000 crore in the remaining two months to meet FY21 expenditure.
Govt to borrow about Rs 12 lakh cr in FY22; expenditure pegged at Rs 34.83 lakh cr, including Rs 5.54 lakh cr of capital spending
Indirect Tax Proposals:
Proposal to review more than 400 old exemptions in customs this year. To put into place new customs duty structure by Oct-1, 2021.
  • Revoking ADD and CVD on certain steel products.
  • Reducing duties on copper scrap from 5% to 2.5%.
  • Some parts of mobiles to move from NIL to 2.5% rate.
  • Cutting duty on copper scrap 2.5% from 5%.
  • Exempting duty on steel scrap for a specified period.
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